River and Mercantile has warned it is about to take a £2.8m hit to revenues, following a major client’s decision to withdraw close to £930m worth of assets.
After markets closed on Tuesday, the fund group said it had been notified of a client’s intention to redeem approximately £927m across “several global equity strategies”.
The loss of the client mandate is the latest blow for River and Mercantile after agreeing a deal to be purchased by Martin Gilbert’s vehicle Assetco in January.
Earlier this month founding partner Dan Hanbury announced he was resigning from the business, creating uncertainty for the £674m River and Mercantile UK Smaller Companies fund, the largest in its stable.
River and Mercantile revealed on Monday ex-Schroders man Matt Hudson would take over Hanbury’s £116m UK equity income fund.
Group chief executive Alex Hoctor-Duncan (pictured) said: “We are an organisation focused on moving forward, delivering high quality active equities and infrastructure fund management to our clients. Losing a client is disappointing, but we are gearing up for several fund launches and will welcome Matt Hudson to run our UK income fund at the end of this month. The motivation of the team is apparent, especially now that we are a specialist equities and real assets focused business post the Solutions sale.”
In a statement to Portfolio Adviser an Assetco spokesperson said: “The reported loss has not altered our confidence in River & Mercantile’s investment team, their approach and the underlying business.”